Friday Q&A

Friday Q&A Hello Smart Option Sellers! I just realized I had the wrong date listed (Oct 18) on the earlier email today. Geez! TGIF! And speaking of the earlier alert... We had two trades recommended, one being an adjustment from a previous unfilled trade. Once again, the stocks popped on us a bit, which only allowed the first few Smart Option Seller members a chance to get filled. When stocks rise, put option prices go down. I'm thankful that the stocks move in the direction we need, which means we're doing something right. But at the same time, I'm just frustrated that we NEVER seem to get a pull-back of any meaningful magnitude that lets everyone easily get involved with the trade at the same time. There's three solutions for that, none of which I'm too fond of: 1. We use a lower entry sell price. This is fine, but then sometimes the payment is too small. 2. We use a higher strike price. This is fine too, but then we don't have as much downside cushion. 3. We go out further in time to a longer expiration date. This is fine too, but then we have to wait longer to make a profit. None are ideal, but are worthy considerations. If you did not get filled today, let's wait a bit and see if the stocks have a decent pull-back to the point where the rest of the gang can get filled. Using the March & April 2018 expiration dates gives us enough time where a small move in the stock should produce enough movement in the put option price to allow easy fills. Hang in there, and keep your orders working "GTC". Now, onto the questions. Q: Hi Lee: I find that we have a lot of our stocks have the "C" in front of the price. I assume that is the close from the previous day. Some of them have been that way for days. My question is. Isn't it the job of the market maker to see that some kind of trade is done every day? Even one contract would do. A: Yes, the "C" indicates the closing price from the last time it traded, not necessarily from the day before. Some of those closing prices can be from days or weeks ago, especially if it's an unpopular option. Always look at the bid/ask quote to get an accurate assessment of the option's value. And yes, it's the market-makers job to always provide a liquid bid/ask market, but it's not necessary for them to mak